III.  Economic Trends and Outlook

 Four out of five Malians live off the land and most depend on
 cash crops and livestock for their livelihood.  Production of
 cotton, Mali's biggest export, expanded in most recent years
 until 1993, although low world prices have held down foreign
 exchange earnings.  The 50 percent cfa devaluation in January
 1994 promises to boost cotton, livestock, gold and other
 exports.  Cotton shipments and livestock and produce sales,
 especially to Cote D'Ivoire, have already increased due to the
 devaluation.  Exports of African-style clothing, Sheanut-based
 cosmetics and fresh fruits and vegetables are also benefitting
 from the cheaper cfa franc.  However, the devaluation increases
 the cfa cost of imports to Mali, including non-cfa zone inputs
 for local manufacturing.  This handicaps non-cfa zone exporters
 to Mali, but should promote investments in export and import
 substitution ventures in Mali.

 Principal Growth Sectors:

 Agriculture - cotton, sugar, rice, coarse cereals and fruit and
 vegetable cultivation; animal husbandry - cattle, sheep and
 goat raising and hide tanning; and gold extraction and
 processing hold the most promise as Mali's principal growth
 sectors.

 Government Role in the Economy:

 Mali's post-independence Socialism has given way to emphasis on
 free trade and private enterprise aided by economic reform
 policies supported by the IMF, World Bank, the United States
 and other donors.  Mali welcomes foreign private investment to
 boost economic development and the government seeks to
 privatize most public enterprises.  The investment, commercial
 and labor codes offer duty-free importation of capital
 equipment and tax advantages for new ventures in priority
 industries and liberal repatriation of profits and capital.
 The government sees its role as nurturing the private sector
 through an attractive regulatory, administrative and fiscal
 framework for investors and exporters, especially for ventures
 in priority economic areas and those which add substantial
 value to local products or create significant numbers of jobs.

 Balance of Payments Situation:

 Mali has a chronically unfavorable balance of trade.  The value
 of imports typically exceeds exports by 3:2.  Mali's heavy
 dependence on a few commodity exports, often subject to
 depressed world prices, its minimal industrial base and total
 dependence on imported machinery and petroleum are major
 causes.  The cfa devaluation should improve the trade imbalance
 by making Mali's products more competitive on the local and
 export markets.

 Trade and Investment Barriers:

 There are no legal or regulatory barriers to investment in or
 trade with Mali by foreign companies.  There is no
 discriminatory treatment against non-national firms.
 Business registration procedures have been simplified.  There
 are no restrictions on the repatriation of capital or profits.

 Labor Force:

 Mali's labor force is hardworking but mostly unskilled and only
 about 20 percent are literate. Unemployment and underemployment
 are major problems.  Finding jobs is also difficult for higher
 level graduates - Mali has many unemployed accountants,
 engineers and other specialists.

 Major local and third country competitors in major sectors:

 The French are prominent in cotton production, food processing
 and importing, vehicle and equipment imports and petroleum
 retailing.  Japanese vehicles, computer and office equipment
 are commonly found, as are automobile and machinery spare parts
 from Nigeria and consumer goods from Cote D'Ivoire.

 Infrastructure Situation re: goods/services distribution:

 Most of Mali's urban centers are connected by reasonably good,
 paved two-lane roads.  Local street networks vary from good to
 terrible. The sole railway, connecting Bamako with Dakar,
 provides an alternative to freight shipment by truck from
 Abidjan or other entrepots, but is slow.  (Private sector
 interests in Guinea may develop the port of Conakry as a port
 of entry for Mali, etc. And use ships now carrying Bauxite to
 the U.S. To also bring in freight for inland markets).  Air
 freight can be moved several times weekly between Mali and
 Paris, Brussels and other European, Near Eastern and African
 destinations and within Mali.  Schedules are subject to
 frequent change.

 Major Infrastructure Projects underway:

 The Manantali dam on the Senegal river, a Mali-Senegal-
 Mauritania undertaking with World Bank and other donor support
 will develop the irrigation, water transport and hydroelectric
 potential of the Senegal river.  Irrigation works are complete
 but electric production is not scheduled to come on stream
 until 1998.  The road connecting Bamako to Sikasso and the
 Ivory Coast is being modernized.  The Markala Dam on the Niger
 river is being refurbished.